How to choose an Enterprise Resource Planning
Before you can transform the way you work, you have to get it done. That means making changes and investing in the technology that will help you do it. Enterprise resource planning, or ERP, is one example of a technology-enabled change.
ERP is an approach to leading digital transformation efforts by making information crucial to your business available to all who need it.
When it comes to digital transformation, the role of ERP is changing. It’s no longer a one-dimensional system for managing just your finance and accounting. It’s expanding its capabilities to support all aspects of your business transformation needs.
Understand ERP and be aware of how it can help
One way of describing ERP is as a comprehensive, network-based platform that helps business entities manage their operations. Businesses can create and manage multiple projects with different activities, which can then be managed by other departments. By employing efficient use of ERP and an integrated approach to its infrastructure, companies can improve efficiency in many different areas of their business.
ERP applications mainly support bookkeeping, invoicing, payroll management, inventory control, forecasting, risk management, customer relationship management (CRM), asset management, and project management systems.
Choose the right ERP for your company
In business, changing your business strategies should always be undertaken with extreme care and caution. Ironically, if you select the best ERP system without taking into consideration all the underlying components and functionalities, you could end up making the wrong decisions.
There are hundreds of ERP solutions but when it comes to selecting or configuring one, it seems like there are hundreds of tools that choose to target the enterprise market. It leads to a lot of confusion because the majority of ERP users are using an old fashioned binary approach when selecting the application. This approach, wherein users have perceived only two options, leads to less user-friendly and maybe even less effective solutions.
There are a variety of factors that need to be considered when choosing an ERP solution. These factors include cost, simplicity, scalability and accessibility. Understanding those factors is essential to evaluate an ERP solution, ensure that it suits your business requirements, can achieve the desired performance, and is within budget.
You may want to evaluate several ERP solutions, but if none of them fulfils your criteria, it may be best to start over and research another ERP solution.
Here are questions to get you started? The answers may not be obvious and often depend on your specific business goals. However, choosing the right ERP application involves more than being able to customize modules and functionalities.
1. Does it meet your business requirements?
A good ERP achieves your business needs and leads to efficiency gains. You should, therefore:
- Learn your pain points. Identify specific goals for your system, then determine both the workflow processes they support and the system’s suitability for meeting those needs.
- Assess whether the system supports cross-functional teams or just your own departmental needs.
- Make sure the features and functionalities of the system support specific business processes while moving at the speed of your business.
2. What resources will you need to implement or use it?
ERP system requires time and training. The more robust the system or complex the project is, the bigger that time and training gap is going to be.
If you require to upskill or source external skills, how much does it cost per hour for the services you will be paying for?
A good ERP system will come with comprehensive training materials and customer support through web forms, phone, email or live chat.
3. Free or Premium?
I know many people usually want to do away with the recurrent subscription or renewal fees. However, a free ERP system does not come cheap.
A free ERP requires internal resources to maintain. There are many ERP platforms available for free and for a small fraction of their price. It matters not to pick a free ERP system unless you’re sure it will suit your needs, capabilities, and budget. It also matters not to select a free ERP platform that has been out for less than a year if you’re looking to increase efficiency and save money in the long run.
Premium ERP system usually offers robust functionalities and responsive customer support. You might have to pay more initially but the price tag also carries some guarantee of a quality product.
It is important to consider and plan for the initial setup fee in your budget. The successful implementation of ERP depends on it.
4. Is it Scalable?
ERP system should be able to scale in terms of new functionalities and capabilities. In terms of functionalities: should adapt to users needs and enable additional modules. In terms of capabilities, an ERP should also handle higher loads as there will be more data to process.
Find an ERP provider that provides customized solutions for your business instead of a one-size-fits-all approach.
5. Cloud or On-Premise?
This generally depends on your tech infrastructure, internet connectivity, and location of users.
Cloud ERP is hosted by one of several cloud providers in an on-demand manner and generally managed through an on-premise server or clusters of servers.
On-premise ERP is installed and managed by an IT department directly, except for certain advanced features which may be hosted by third-party providers. An on-premise ERP is accessible over a local network, or remotely via a VPN.
Most ERP solutions are designed to benefit the business. But this is not always the case. Then again, no ERP system is perfect. Even the best ones have flaws. If you want your business to grow, the focus needs to be on the right ERP option and its implementation plan.
The best solution isn’t always a matter of selecting the most expensive or simple ERP solution. You still need to analyze relevant criteria to determine which ERP system is right for your business and industry, with the right combination of standards, features and customizability.
If you would like to have a conversation around your business transformation goals, we can help. Get in touch at Wingo.net.
